Bitcoin News Today: Leverage Wiped: $19B Crypto Crash Exposes Market's Fragility

The cryptocurrency market reeled from its largest liquidation event in history in October 2025, with over $19 billion in leveraged positions wiped out following former U.S. President Donald Trump's surprise announcement of 100% tariffs on Chinese imports. Bitcoin (BTC) and Ethereum (ETH) plummeted, with BTC dropping from $125,000 to as low as $102,000 within hours, while ETH briefly fell below $3,500, triggering panic across traders and exchanges .

The crash was fueled by a combination of geopolitical tensions and overleveraged positions. Trump's tariffs, announced via Truth Social, reignited fears of a U.S.-China trade war after Beijing imposed export controls on rare earth minerals. "This was a black swan event," said David Jeong, CEO of Tread.fi, noting that leveraged perpetual futures amplified the sell-off . CoinGlass data revealed that 1.6 million traders were liquidated in a single day, with Hyperliquid reporting a $203 million ETH trade wiped out in the chaos .

The market's fragility was further exposed by systemic weaknesses. DeFi protocols fared better due to strict collateral requirements, but centralized exchanges like Binance faced outages and criticism for delayed liquidation reports . "Leverage wiped. Liquidity cleared. Weak hands capitulated. This is exactly when massive rallies are born," tweeted trader Alex Wacy, highlighting the potential for a rebound .

Historical context adds nuance to the crisis. Previous crypto winters-triggered by events like the 2014 Mt. Gox collapse and the 2022 Terra/Luna implosion-typically followed periods of speculative excess and macroeconomic shocks . An AI-driven analysis of market cycles predicted the next crash would likely occur between Q4 2026 and Q2 2027, citing current easing Fed policies and institutional adoption as delaying factors .

Despite the carnage, some altcoins showed resilience. Radiant Capital (RDNT), Morpho (MORPHO), and Succinct (PROVE) rebounded sharply amid broader market weakness, driven by retail demand and whale accumulation . Zcash (ZEC) defied the downturn, surging 74% weekly as both retail and institutional investors flocked to its privacy-focused token .

China's Ministry of Commerce (MOFCOM) pushed back against U.S. tariffs, framing its rare earth export controls as legal national security measures rather than bans, while urging dialogue to avoid escalation . Meanwhile, crypto analysts remain divided on the outlook. Peter Brandt, a veteran trader, called BTC, ETH, XRP, and XLM "ready to move higher," while others warn of prolonged volatility if trade tensions intensify .

The crash has sparked calls for regulatory scrutiny, particularly after Binance and other exchanges faced accusations of exacerbating the crisis through technical failures. "This event underscores the need for greater transparency and reliability in centralized platforms," said Quinten François, a crypto analyst .

As the market digests the fallout, Bitcoin's ability to stabilize above $110,000 will be critical. If it holds, some analysts predict a rebound toward $125,000 by year-end, fueled by bargain hunters and institutional inflows . For now, the crypto sector braces for a turbulent winter, with the next major test likely hinging on U.S.-China negotiations and the Fed's policy path.

Source: [1] When Will Be The Next Big Crypto Market Crash? The Answer Will ... (https://finance.yahoo.com/news/next-big-crypto-market-crash-202109894.html)

[2] These 3 Altcoins Beat The Crypto Market Crash and Look Bullish (https://beincrypto.com/altcoins-bullish-rebound-after-crypto-market-crash/)

[7] Crypto Collapse or Cleanse? Leverage Flush Could Set Stage for ... (https://ecoinimist.com/2025/10/12/crypto-collapse-cleanse-leverage-flush/)

[9] Crypto Selloff: Is A BTC And ETH Comeback Ahead? - 99Bitcoins (https://99bitcoins.com/news/altcoins/livecan-btc-and-eth-rebound-after-a-19b-liquidation-storm/)

[12] Crypto Markets Reel from $19 Billion Crash Amidst Intensifying US ... (https://markets.financialcontent.com/stocks/article/breakingcrypto-2025-10-12-crypto-markets-reel-from-19-billion-crash-amidst-intensifying-us-china-trade-war-fears)

[13] Crypto Markets in 'Extreme Fear' as China Rebuts Trump's (https://www.coindesk.com/markets/2025/10/12/china-s-commerce-ministry-to-trump-rare-earth-export-curbs-are-not-bans)

[14] Crypto Liquidation hits $19B as Trump's China Tariff Triggers ... (https://coinpedia.org/news/crypto-liquidation-hits-19b-as-trumps-china-tariff-triggers-market-crash/)